Green’s Dictionary of Slang

(US milit.) head lice.

1941		S.F. Chronicle 1 June H5/7: The draftees assigned to Camp Claiborne, in Louisiana, got out a glossary of slang terms to describe everyday things in army life [...] The Louisiana lads call [...] insects, ‘motorized dandruff’.
1989		M.R. Berenbaum Ninety-Nine Gnats, Nits, and Nibblers 232: Pediculus humanus, variously known as the head louse, body louse, grayback, cootie, seam squirrel, or motorized dandruff.
2003		(ref. to WWI) Homeopathic Families 101: In soldier’s slang in World War I all body lice were known as cooties, but World War II made that term obsolete — the modern version is motorized dandruff!